WPP PLC

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

WPP plc (NYSE: WPP) is a creative transformation organization, offering national and multinational clients a range of communications, experience, commerce, and technology services. The Company operates through three segments: Global Integrated Agencies, Public Relations, and Specialist Agencies.

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 75% in the last three months on the other hand given a return of 2.99% in past six months.
• The stock is in its lower band of its 52-week range of USD 60.37 and 52-week low price of USD 41.13. Post the announcement of FY23 results the stock has corrected by 3.44% with the current price at a current important support of USD 44-USD 46.
• The price is currently trading below both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current oversold RSI of 25.52.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~3.85% of the total shareholding, signifying diverse shareholding. Mondrian Investment Partners Ltd., and Goldman Sachs Asset Management, L.P. are the biggest shareholders, holding the maximum stake in the company at ~1.06% and ~0.54%, respectively.

1.4 Key Metrics

Over the five-year period from 2019 to 2023, the company's revenue exhibited a fluctuating trend, starting at USD 13,234 million in 2019 and ending at USD 14,845 million in 2023. Concurrently, gross profit also displayed variability, commencing at USD 2,409 million in 2019 and ending at USD 2,519 million in 2023. Despite fluctuations in revenue and gross profit, the gross margin experienced minor fluctuations, starting at 18.20% in 2019 and ending at 16.97% in 2023. The stability of the gross margin indicates effective cost management relative to revenue across the observed period, despite fluctuations in revenue and gross profit. This suggests the company's ability to control costs efficiently, contributing to its financial health and operational efficiency.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of FY23:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 75% in the last three months on the other hand given a return of 2.99% in past six months.
• The stock is in its lower band of its 52-week range of USD 60.37 and 52-week low price of USD 41.13. Post the announcement of FY23 results the stock has corrected by 3.44% with the current price at a current important support of USD 44-USD 46.
• The price is currently trading below both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current oversold RSI of 25.52.

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 10, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.